The empowered group of ministers (eGoM) may have finalised its decision on special economic zones (SEZs) by capping the size of multi-product zones and prohibiting state governments from forcibly acquiring land for developers, but clarity still eludes the country’s SEZ policy.
The commerce ministry now wants to know the cut-off date applicable to the eGoM’s directive to the state governments not to acquire land.
On 5 April, when the group arrived at its decision, most people believed that the cut-off date would be 10 February, as it was the date rules regarding the zones were notified by the government, but the commerce ministry isn’t sure.
“Since the minutes of the e-GoM do not mention a cut-off date, one could argue that the move should be prospective. We will however need to clarify the issue. The clarification is needed for the zones which have in-principle approval and new zones,” said an official at the commerce ministry who did not wish to be identified.
Officials at the ministry said they had received over a dozen queries from developers.
“Developers have acquired land through different means and in phases. They want to know from when the new stipulation regarding land acquisition is valid. We will collect these queries and in the next two weeks seek clarification,” said the official.
The minutes of the meeting also state that all issues raised by the finance ministry would be considered at the next meeting of the group.
“The commerce ministry is agreeable to the point raised by the revenue department (part of the finance ministry) that there are certain categories of SEZs which completely escape the export obligation norms.
Some industries in SEZs buy all their inputs from a domestic unit. In such cases, since the purchases are not imports, the unit does not have to export. The government is expected to introduce changes so that any supply made to an SEZ by a domestic unit using export incentives will be treated as import,” said the official.
The Board of Approval, the inter-ministerial body for approving SEZs, will meet on 9 May to take up 19 cases for formal approval.